According to Woofun AI, HYPE, the decentralized derivatives trading platform Hyperliquid's own token, faced significant downward pressure after the US midterm election results were released, and its price trend is directly mirrored by changes in the political landscape.
Although the platform was highly anticipated by the market due to President Donald Trump's public promise to “bring relevant services directly to the US,” the Republican Party's loss in the election completely changed policy expectations. At 1:51 p.m. Beijing time on the 5th, CoinMarketCap data showed that HYPE's transaction price remained around $83.42, continuing the decline.
This price performance is not an isolated market fluctuation, but rather the result of a combination of political changes and capital withdrawal. Originally seen as a core decentralized trading platform (DEX) that is expected to break barriers to entry into the US market, now due to the restructuring of congressional power structures, its path into the formal financial system has become extremely rugged, and market sentiment has changed from optimistic to cautious or even pessimistic.
From a structural point of view, abrupt changes in political fundamentals are the primary variables that trigger asset revaluation. As the leading platform that accounts for more than half of the world's decentralized unlimited contract trading volume, Hyperliquid has been banned from US users until now. However, the Trump administration sent a signal at a White House event involving crypto industry executives on August 19. US Commodity Futures Trading Commission Chairman Michael Selig said it was promoting Hyperliquid's entry into the US market in a “fully compliant and legal manner.” This directly spurred a sharp rise in HYPE's price, and the market expects the agency to grant the relevant license. However, in the US midterm elections held on the 3rd local time, the Democratic Party successfully controlled both the Senate and the House of Representatives. This result made the Trump administration's policy of easing digital asset regulations and legalizing overseas DEX face the risk of strong resistance at the congressional level. The well-known US media CoinDesk pointed out in a post-election analysis that legislative momentum supporting deregulation policies was seriously weakened by changes in congressional power. In particular, the bill strengthening the CFTC's powers and special entry provisions for DEXs has become uncertain.
This loss of policy certainty directly caused tokens that had previously risen due to favorable policies to face valuation pullbacks, and institutional investors began to speed up profit settlements and adjust their portfolios to deal with potential regulatory tightening risks.
Notably, capital-level selling pressure has further amplified the negative impact of political uncertainty. According to data compiled by Woofun AI, wallets related to Silicon Valley venture capital firm a16z, which is regarded as the largest external institutional investor, are continuing to transfer large amounts of HYPE tokens to major centralized exchanges. Since the end of October, several large a16z-related wallets have transferred over $20.6 million in tokens to platforms such as Gate.io, OKX, Bybit, etc. On-chain analyst Ai Yi (@ai_9684xtpa)'s monitoring details reveal the urgency of this process: In the last 16 hours, these associated wallets transferred 148,145 HYPE tokens worth approximately $12.63 million to the exchange, with an average transfer price of $85.26.
The analyst further pointed out that these addresses have continued to send tokens since October 30, and 32,862 were recharged in a single transaction on November 4. Currently, the total number of transfers has reached 233,000, with a total value of about US$20.6 million. If all of these tokens were sold at market price, the estimated profit would be around $1,141,000. Although it is not yet possible to confirm whether the tokens will be immediately sold at market price, this large-scale and continuous flow of capital to exchanges has undoubtedly increased the downward pressure on the market.
The more critical variable is that this sell-off may not be a short-term panic caused by the election results. Since large-scale transfers began on October 30, before the election, some analysts believe this reflects venture capital agencies' typical quarterly portfolio adjustments or proactive risk avoidance strategies. US digital asset research firm CryptoSlate pointed out that assets that received higher premiums due to the Trump administration's promise to be included in the formal system were the most vulnerable to post-election political uncertainty. When the average holding cost of large institutional wallets is at risk, and more tokens are transferred to exchanges, it is easy to trigger stop-loss behavior by retail investors, which in turn leads to chain sell-off. The current price trend of HYPE reflects this logic: the collapse of political expectations resonates with the withdrawal of institutional capital, making it difficult for the token to escape the slump in the short term.